Key housing markets are starting to buck national trends: Redfin

Even as the median U.S. home sale price remains near record highs and supply stays constrained in many locales, two of the most populous states that have seen a surge in demand since the start of the COVID-19 pandemic are showing signs of a pullback.

That’s according to a pair of reports released Thursday by Redfin. The national real estate brokerage found that the nationwide median sale price reached $420,357 in March 2024. That figure was up 5% year over year and was only 3% below the peak price of $432,496 in May 2022.

In Texas and Florida, however, key market signals show diverging trends. Redfin reported that among the 10 U.S. metros areas with the largest annualized increases in listings in March, six were in Florida and two were in Texas. Cape Coral, Florida, led the way in this category with supply growth of 51%. Major markets such as Tampa, Orlando and Dallas also posted supply growth of 20% to 30% during this period.

Additionally, of the 10 U.S. metro areas where price cuts were occurring most frequently, five were in Florida and two were in Texas. North Port-Sarasota, Florida, topped this list as 48% listings last month included a price cut. Tampa, Orlando, Houston, San Antonio and Jacksonville all had price-cut shares of at least 33%.  

Redfin noted that for-sale supply at the national level rose by 10.2% year over year in March, although growth in listings is expected to subside due to the lock-in effect of higher mortgage rates. HousingWire’s Mortgage Rates Center showed that the average 30-year conventional fixed rate was 7.56% on Friday — up from 6.83% at the start of the year.

“My advice to sellers is to price your home fairly,” Chen Zhao, economic research lead at Redfin, said in a statement. “Even though sellers are getting top dollar at the moment, they should price competitively to attract buyers from the start and avoid having to drop their price as stubbornly high mortgage rates eat into buying budgets.

“Price growth may cool slightly in the coming months if mortgage rates stay high or rates might fall slightly — but overall housing costs are likely to remain elevated for the foreseeable future.”

Listings in Cape Coral were spending a median of 31 days on the market longer than in March 2023 — the largest increase in the nation, Redfin reported. It also noted that Florida and Texas have built more homes than other states in recent years as they sought to accommodate the influx of pandemic-era migrants, but “the boom is over, in part because many people have been priced out.”

“Out-of-town homebuyers no longer see Florida as a place to get amazing value,” Eric Auciello, a Tampa-based Redfin sales manager, said in a news release. “Now they’re moving to North Carolina or Tennessee to get a good deal. Many local blue-collar workers have been priced out of homeownership, too.”

Rising costs for homeowners insurance are also playing a part in sagging affordability. S&P Global found that homeowners insurance rates in Florida soared by 43.2% from 2018 to 2023. Florida homeowners, on average, now pay $6,000 a year to insure their property — triple what they paid in 2019, according to the Insurance Information Institute.

“Florida, like many places, is seeing the insurance piece of the component impacting people’s payments in a way that is making it hard to them to navigate the market,” Cyndee Haydon, a Florida-based agent for Future Home Realty, recently told HousingWire.